You are here: ninemsn > Money > Centsibility
Rated: |

GST increases prove very taxing

Being a retailer can't be the easiest job in the world, but are some of them using the 2.5 percentage point increase in GST to up their prices unnecessarily?

When the change to GST was announced earlier in the year, the government warned retailers not to use the October 1 introduction as an excuse to start charging extra, willy-nilly.

You'd like to think most companies are honest and not trying to rip you off, but if they claimed invoicing at 15 percent started on October 1 because that's what the legislation says, they are hiding the truth.

A "transitional provision" to the legislation gave suppliers the opportunity to invoice customers at the old rate if a service was carried out before October 1. For example, if your electricity bill for September was issued between October 1 and 11, it should be charged at the 12.5 percent rate, when the transitional period was active.

"I understand some major utility companies such as Meridian, Genesis and Auckland Metrowater," Revenue Minister Peter Dunne said, "have chosen not to use the transitional provision and consequently charged the higher rate of GST." He advises companies that are "unfairly" charging the higher GST rate on September bills to credit their customers' accounts.

The Commerce Commission has received more than 80 complaints from consumers about increases in prices since October 1. Commission enforcement manager Graham Gill said businesses can increase their prices "whenever they like, for any reason". However, claiming a price rise "is due to the increase in GST, when the increase is far greater than the cost of the GST rise, is potentially a breach of the Fair Trading Act".

The Dominion Post was caught out by doing this and owners Fairfax Media have received a formal warning from the commission. Four other cases are being investigated, but the majority of complaints so far are either unlikely to breach the Fair Trading Act or have not met the commission's enforcement criteria.

So watch out, the Commerce Commission "can and will take enforcement action" if they find the Fair Trading Act has been breached. The courts can then impose fines of $200,000 on companies and $60,000 on individuals.

User comments
So really what the government is saying is this,,,,,,,We as the ever powerfull government are allowed to rip the tax payers off by increasing tax from 12.5 to 15% but you low life bleeding tax payers and business people are not allowed to increase your prices,,,,,,,,,WHO the hell does the government think it is, Take a jump.
Jhon keys is increaseing his pocket money -protest now

Write a comment
Email: *
Your email will not be shared with any third parties or published with your comment.
Nickname: *
Location: *

Maximum characters 1000

Comment guidelines > View full guidelines
Avoid using:
  • Personal attacks
  • Irrelevant comments
  • HTML tags
  • Personal information
  • Offensive language
comment guidelines X
Thank you for sharing your opinions with other users of NineMSN. People will find your comments more helpful if you include relevant information and avoid some common pitfalls.
Please note: All reviews and comments submitted are subject to moderation, NineMSN reserves the right to alter and / or remove any content that does not comply with usage guidelines.
What to include in your comment:
  • A title that briefly summarizes the opinion expressed in the comment.
  • Additional comments adding more detail.
  • Comparisons to other similar products, if this is relevant.
  • To create a new paragraph, press the Enter key twice.
What not to include:
  • Information that will quickly go out of date.
  • Comments on other comments or commenters.
  • Language that other users may find offensive.
  • comments of one sentence or less. Provide information to support your opinion.
  • Personal information like your email address or telephone number.
  • HTML coding. Tags like <b> or <i> will not be recognized.